There are two kinds of startups – those who succeed and others who constantly try. In Britain, at least half the companies fail to last more than five years and in the US, three out of four startups are going bust without managing to turn a profit.
The team and leader define the success of any startup. I was recently at Ernst & Young’s Entrepreneurial Winning Women lunch where iVvy CEO Lauren Hall was speaking on the panel on the purpose of startups. One thing she said that resonated very strongly with the audience was, “You can be the most amazing and visionary leader, but you’re only as good as the people around you.”
Lauren is right. TechCrunch talks about how we are conditioned to think that the success of startups relates to one person with a brilliant idea and great products. But the reality is that there are often a few committed people who carry forward the founder’s vision through to success. After that initial burst of founding energy, it takes hard work to define and articulate a vision to employees who come on board afterward.
To get the best out of the people, you need to be a great leader. If you are not one, you might find yourself being voted out of the leadership like Steve Jobs, Jack Dorsey and many other startup founders.
Twitter case study
Twitter’s founder and newly reinstated CEO Jack Dorsey is doing what no one ever has before – managing two companies full time as a CEO – Twitter and Square. Steve Jobs did this in the early days of Apple when he was reinstated to the CEO role; but even he started off part time before taking the helm of Apple full time and stepping away from Pixar.
Great people can give leaders the confidence to take on challenges. Twitter is doing everything it can to get and retain the best talent in the business. They started a free breast milk delivery service to up the number of women employed (from 34%), rehired a head of strategy who had left them for Google Ventures and started a service allowing employees working late to take home meals to their families at subsidised prices.
Jack Dorsey and Twitter know that given the competition for talent, they have to do their best to reward their staff every step of the way if Twitter is to break out of its current lull.
As an angel investor, I am surrounded by amazing people, particularly women, in startups and every one of them is driven, determined and passionate. Success to this bunch is not just about money, but a better way of doing things, creating a new lifestyle and ultimately, democratisation of opportunities.
People working in startups are amongst the most agile and productive group you’ll come across. Combined with ingenuity, this has been instrumental in their rise to success – especially against bigger corporates. But the very thing that has helped build startups is causing them to burn out too.
A recent article in The Telegraph talks about how startup culture is killing real entrepreneurship with a generation of people not working hard enough to nurture the company. The author says that even when true innovation happens, there’s increasing tendency not to attempt to create a business with a long-lasting plan, but instead chuck it towards larger corporations in exchange for a handful of cash. And that this is creating a culture where people are ignoring the reality of the business.
There is nothing wrong with aiming for a short exit strategy. But you have to be mindful of the impact of this goal on building a sustainable business model.
Unlike corporates with processes and systems, setting a positive culture for growth is not easy amongst startups. CEOs often find it hard to let go of the reins and do what they have to – lead.
Startup CEOs have a dual role of finding a fine balance between agility and processes. These processes and practises have to be established early on too. Harvard Business Review observes that entrepreneurs actually show their inability to switch to executive mode much earlier in the business development process than most people realise.
Leadership stems from looking at how you are creating value – to your startup, your customers, your people, the society and the country you operate in. Every leader should ask themselves and their teams what value they are creating and how. It is not just what you do; how and why you do it matters too.
The minute you start thinking about value, you start caring about what’s important and chucking out that which isn’t. Atlassian did this and removed unnecessary meetings and sales people, reinvested in their employees and rose to the top of their game.
In a world filled with stories of those trying, Atlassian have done things differently. That’s why, they are one of Australia’s biggest startup success stories and also the ‘Best Place to Work’.
As TechCrunch says, it’s one thing to come up with a great idea; it’s another to pull together the right group of people to execute it. Fighting the daily battles and conquering the world requires investment in great people – today.
About the author:
Renata Cooper is the founder of Forming Circles Global, a unique angel investment and mentoring organisation that predominantly invests in female-led technology startups. Committed to empowering women entrepreneurs, Renata has invested in over 100 national and global businesses, individuals and organisations since 2011. She is a member of Scale Investors and a muru-D mentor.